Article – BusinessDesk
Tuesday 31 May 2016 04:16 PM
Mercer Group to consolidate operations in Christchurch
By Edwin Mitson
May 31 (BusinessDesk) – Mercer Group, the stainless steel fabricator, is to restructure its operations by consolidating design, engineering, and machine manufacturing in Christchurch.
Its plant in New Plymouth is to be restructured to “be right-sized for the current market environment”, according to a statement published to stock market operator, NZX. Its Auckland office is to be retained with a focus on sales.
No details on job losses have been given, which are to be confirmed following consultation with staff. The total cost of the restructuring is estimated to be $575,000. Mercer’s current market value is $9.6 million.
Mercer Group has been selling assets as a new executive team look to turn the business around. In October 2015 it sold its unprofitable medical division for $2.03 million while a management buy-out picked up the interiors division for $2.15 million two months later. In its interim report published at the end of March, Mercer told investors the board was looking to split the two remaining business units, which are the Stainless division and the new S-Clave sterilisation technology.
The board said then it was considering selling the S-Clave intellectual property into a new entity and raising fresh capital to fund it, and the potential sale of the remaining Stainless division.
In today’s update, the board said it is currently assessing capital raising alternatives and expects to make an announcement within the next two months.
Shares in Mercer Group were unchanged at 3.1 cents. They’ve fallen just under 40 percent since the start of the year.